I take my 30 years of reading the great classics of Economics, Literature, History, Political Science, Philosophy and Theology, and apply what I've learned to the most demanding problems which leaders face, especially investors and entrepreneurs.

Recently he took time out of his busy schedule to sit down across a Skype connection with me, at the hinge point between 2012 and 2013 to reflect on intelligence, forecasting, what he saw in the 1980s which others did not, and what he sees coming next, which might be even bigger than the fall of the Berlin Wall.

I suggest you set aside some time to listen to the whole discussion (more of a thinking session than an interview), but in case you don’t have time, I jotted down some notes hitting just a few of the highlights from the conversation. These are notes, not perfect transcriptions, so they sometimes paraphrase a bit. For the real unfiltered thing click on this link.

Regarding the CIA and its inability to see the fall of the Soviets:

They (that is most of the intelligence community) saw the Cold War as a permanent feature of the world. But Reagan came along and said, ‘wait a minute, the Soviet Economy is on the verge of implosion.’ The ‘establishment’ said the Soviet Economy would go on forever.

The CIA had been built to monitor Soviet strengths, but nobody was looking at Soviet weaknesses.

The key to it is to know what you’re looking for in order to find it. Until we asked ‘can the Soviet Economy be sustained?’, nobody was looking in that direction. We had our people look for intelligence about Soviet weaknesses. The weaknesses were overwhelming the strengths.

It never occurred to anyone that the Cold War would end, so we were playing defense. From the end of WWII to the 1980s the world was playing defense.

Reagan came in and said we don’t want to just not lose the Cold War; we want to win the cold war.

“In the Cold War, we instructed our spies: ‘If you find something like this (whatever we thought was important to identifying signs of Soviet vulnerability), don’t throw it into the wastebasket, send it to us fast.’ We knew that if nothing comes in through that channel, either our theory was wrong or our collectors were incompetent. They got us all kinds of stuff that no one was looking for. If you’re back channel becomes crowded then your theory is probably right.”

It just never crossed these people’s mind that the Soviet Union was unsustainable. They had those ideological blinders on. They viewed President Reagan as so stupid because he felt intuitively that their system could not be sustained.

Gorbachev gave it his best shot; it couldn’t be reformed, and that was his great failure. He said it could be made to work better and that simply was not true.

At one point Reagan had said that he wanted a private conversation with Gorbachev…he said to Gorbachev, “What’s the difference between a communist and a scientist?” “I don’t know,” responded Gorbachev. Reagan smiled and said, “A scientist would have tried it out on rats first.” I think that’s when we won the Cold War, when Gorbachev realized he wasn’t sitting across from the idiot he’d been told he would be dealing with.

Regarding intelligence gathering in general:

Before 9/11 intelligence services never made a list of things to look for as if Al Qaeda were in the U.S. and trying to attack us. When the FBI noticed young men learning to fly planes but without learning how to land, there was no one waiting for that.

The crucial intelligence skill is the ability to spot a pattern with the fewest possible facts. You’ve got to have people who can make that intuitive leap. They’re all over the place…they’re not in our intelligence services.

The key intelligence skill is that you have to know what you’re looking for in order to find it. The notion that you have to keep looking at data endlessly waiting for something to pop up is nonsense, it’s just noise.

Regarding organizational leadership:

The first rule of organizations is that first-rate executives hire first-rate executives. President Reagan was a first-rate executive and he brought in a varsity team: Bill Casey, at the CIA, Cap Weinberger at defense, Jeanne Kirkpatrick at UN and they hired first rate executives themselves.

He understood something that a lot of CEOs don’t. To accomplish your objective you’re going to have to work very closely with people you’re not very comfortable with and don’t want to hang out with. You don’t have to want to hang out with these people to work closely with them. He had his own friends. In contrast, and I don’t want to overstate this, but The George W. Bush people were a bunch of frat boys. It was as if they thought that ‘If I’m not comfortable with you, I don’t want you here.’ They were good guys, but they were all the same. You see this mistake in corporations all the time.

You hire the talent and point them to the objective and get of the way.

You remember that people have different skills. President Reagan, for example, could do things no one else could do, whether it was standing in from the Berlin Wall and telling Gorbachev to tear it down…but he couldn’t name all 25 members of the Politburo. He probably couldn’t name all the members of his cabinet and he saw no reason to clutter up his mind with such detail.

He would not make any decisions which could be made by anybody else. He would only make those decisions which only he could make.

The chief executive shouldn’t be that busy. When I see a chief executive who’s buried in paperwork at ten o’clock every night, that guy doesn’t have a grip on it. The CEO should be sitting there with his feet up on the desk thinking, figuring out strategically what to do next.

Regarding the next big world event that no one is paying attention to:

When you stand back from all the yelling and the screaming…you can see what I believe is the most important trend in the word…the world is emerging from poverty fast. This is the biggest under-reported news story in the world.

By 1980 or 1990 about two billion human beings were out of poverty, since then another half billion have crossed the line out of poverty; a lot of them in India and china. In the last six years 20 million Brazilians have emerged. When you put all these numbers together…each year between fifty and one hundred million human beings are leaving poverty behind.

If we can continue this trend within our lifetimes, and certainly within our children’s lifetimes, the overwhelming majority of human beings will no longer be poor. This is the biggest thing that’s happened in the entire world.

By the way it’s going to be a five billion-person middle class. This will become the most powerful force in the world. Their demand for our goods and services will set off an economic boom…I believe that we’re heading for not just a sonic boom, but maybe a supersonic boom.

I’m not sure I agree with everything Herb Meyer said in our discussion, which is why I challenged him a little bit on his optimism about the pace, or even the possibility, of Islam’s reconciliation with modernity. You can listen to the discussion and draw your own conclusions. But I came away from this with the sense that through Herb, we were being given the opportunity to go back in time and sit in the front row seats at one of the great moments in history (the winning blow which would lead to the dissolution of the USSR) and with one of the great men of history (Ronald Reagan). I also think that he’s right about the emergence of a global middle class: it’s coming, it’s huge, it’s real and it’s spectacular. And investors and entrepreneurs who tap into it will be tapping into the greatest wealth creation event in human history.

However, human nature has not been abolished. The boom won’t happen everywhere; it will happen in the parts of the world which embrace freedom, and it won’t come easily. Supersonic boom? Perhaps, but geographically lumpy and chronologically lumpy and, given recent events, not centered in the United States.

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Oh puh-leeeeeze!!!! Ronald Reagan did NOT…..repeat DID NOT….predict, anticipate, or otherwise foresee the implosion of the Soviet Union. And I can easily prove it.

At the 1986 U.S.-Soviet summit in Reykjavik, Iceland – in the final years of his presidency — the Great Communicator proposed to Mikael Gorbachev that the U.S. literally eliminate its nuclear arsenal over ten years…..if the Soviet Union would promise to do the same.

Why in God’s name would he have proposed such a folly if he believed for one moment that the Soviet Union was anywhere near imploding….or if he believed that the U.S. held military superiority over the USSR? When he made that stunning proposal, Reagan gave every indication of a man bargaining from a position of weakness.

I challenge anyone who shares the views expressed in the article to respond to my question above. By the way, can you imagine the reaction in Congress if Reagan had been foolish enough to submit such a treaty for ratification? I suspect there would have been calls for his impeachment…from his own party.

Conservatives NEVER mention this sad episode when they wax eloquent about Ronald Reagan. I can understand that.

It would be consistent with your scenario to imagine that Reagan was thinking that if such a treaty were to be signed, since communism was still a dead-end, then within a few more years, the remaining soviet conventional army wouldn’t be a big threat either.

In any case, your retelling of the Reykjavik proposals does not jibe with my recollection – or those of wikipedia – where it was Gorbachev that suggested elimination of *all* nuclear weapons, not Reagan.

Whether you accept Wikipedia’s version of events or contemporary news accounts of the summit, the fact is Reagan EMBRACED the idea of eliminating the U.S. nuclear arsenal in exchange for a Soviet commitment to do the same. I strongly suspect Nancy Reagan had been whispering in his ear.

By all accounts, Reagan was deeply disappointed that the proposal failed to go anywhere when Gorbachev wouldn’t accept the Star Wars space shield as a condition for the agreement.

He should have thanked his lucky stars that such a foolish and disastrous idea went no further than the summit meeting. I firmly believe Congress would have run him out of town on a rail had he tried to commit our nation to such a folly.

By the way, whatever became of that ‘Star Wars’ space shield idea? It sort of went the way of Chia pets, parachute pants, women wearing “big hair” styles and other fads of the 1980′s….didn’t it?

Not sure I understand your point about the Soviet conventional army. By the time of the Iceland summit meeting, they were mired in an endless war in Afghanistan…after which, sadly, Reagan and H.W. Bush promptly turned our attention elsewhere, thus allowing that pitiful country to turn into a training ground for future terrorists. To this day, we are still paying for that unfortunate decision.

I will hold at responding only to your inflammatory “I challenge anyone …” bit, having pointed out that there is no real contradiction between advocating for nuclear disarmament -and- expecting one’s opponent to self-destruct.

No real contradiction?? Again I ask you, why would a president who supposedly believes his enemy is about to self-destruct offer to PERMANENTLY put his own nation in such a helpless and vulnerable position (i.e., without a nuclear deterrent)?

To what end?? For whose benefit?? Why didn’t representatives of the State Department and the Defense Department call an immediate ‘time-out’ on the negotiations when Reagan proposed such a thing? Your argument doesn’t address these questions.

Despite his previous position as president of the Screen Actors Guild, Reagan apparently never took the course “How to Bargain and Negotiate Effectively 101″.

Sorry, but your position doesn’t make sense if Reagan really believed the USSR was about to implode, as the article insists.

Charles, you’ve got some little hobby horse here that you’re riding to death. First, you haven’t proven that Reagan made that offer. If you have proof, offer it.

Second, even if that offer was made it simply does not prove that Reagan did not believe the Soviets would collapse. Your argument is a complete non-sequitor. Maybe he was calling their bluff. Maybe he really did hate nukes as much as he always said he did.

We know Reagan thought the Soviets would collapse. It’s in a bunch of the biographies, DSouzas comes to mind, plus you can listen to the audio of Reagan’s number two guy at CIA.

Sorry, but if you’re suggesting that Reagan did not propose and/or embrace the idea of eliminating the U.S. nuclear arsenal in exchange for a similar commitment from the Soviet Union, then you know nothing about the 1986 U.S.-Soviet summit meeting at Reykjavík, Iceland in October 1986.

Check out any book on the subject, or faster yet, do a quick GOOGLE search on “Reagan Gorbachev Iceland Summit 1986″ and pick your source. Then you’ll acknowledge that Reagan DID, in fact, offer to do what I just said.

In my mind, I can still see that news footage of Reagan and Gorbachev walking together very glumly with eyes cast downward as they left the house in Reykjavik where they’d been ‘negotiating’, after having called an end to the discussions due to Gorbachev’s refusal to accept the ‘Star Wars’ defense shield as a pre-condition to mutual nuclear disarmament.

My own impression is that Reagan was acting out Nancy Reagan’s fantasies, the same way he went along with her use of astrology in scheduling White House appointments and events. Remember, Reagan was mocked rather savagely at the 1984 Democratic convention for having been the first U.S. president since Herbert Hoover to have never met with a Soviet leader during his term of office.

To use your own term (with spelling corrected), it is a complete non-sequitur for a president to propose MUTUAL nuclear disarmament IF he really believes his enemy on his deathbed….AND if he intends to win the Cold War! Why would he?? Why should he?? UNLESS he considered the USSR a dangerous, ongoing, present-and-future threat to U.S security, rather than a feeble, dying behemoth as you seem to suggest.

Did Reagan honestly think that absent the Soviet Union’s nuclear arsenal, there would NEVER be a need for nuclear weapons??? Did Reagan really wish upon us a world in which only rogue nations (like Iran) would have nuclear weapons?? What was the man thinking of??

Shortly after that summit meeting, while liberals applauded Reagan’s proposal, I can remember conservatives like Pat Buchanan and one or two other brave souls commenting on the whole sad affair. Each of them posed the same questions I did.

I would love to see an articulate conservative (like yourself) do something that I’ve never seen an articulate conservative do in print: Write an article for a well-known conservative publication (like Forbes) about the 1986 Iceland summit meeting…what was discussed, what was proposed, why it ultimately failed, and what it told us about Reagan and Gorbachev…as well as its place in Ronald Reagan’s legacy.

Would such an article reflect some revisionist history? No doubt, it would. But like it or not, that meeting and what it taught us are a part of Reagan’s legacy.

All this was predicted in advance by the stock markets action beginning a quarter century ago in 1987 and more importantly august 1982..The world wide rush to free enterprise, democracy and capitalism and its attendant world wide economic boom is being discounted by the stock market……Fear levels will rise with the stock market as a pavlovian response to what has occured the last dozen years. The Dow’s divisor is now a multiplier thus 40k on the Djia will be a piece of cake and will make the 90.s look like childs play in comparison. So it is written and so it shall be.

NO – when the FBI ‘noticed’ Muslims learning how to fly, they escorted them through the entire process in a well know strategy known as the False Flag operation to mold public opinion.

Only Europeans were treated to an internet interview right after our 9/11 “surprise” attack – by a woman who lived the Florida complex with the Saudi perps.

She looked into the camera and said

“They were such nice young men. And they even had Israeli friends!. But everybody in the building knew something was up, there were agents everywhere. Now we know what they were here for.”

We do indeed.

I would love to dig up that interview which is long gone. I saw it from Belgium in the days following the ‘attack’, and expected the necessary internal investigation that should have put Bush and his dog Cheney in front of a firing squad.

I would dearly love to click on that link, but it’s not working for me. Any suggestions?

I spent 18 days in China this past fall. It’s flat out amazing what’s going on in that country right now. In Shanghai, Beijing, Xian and other major cities, high-rise condos are being built at an astonishing rate to accommodate the Chinese moving into those cities to take the jobs that launch them into the middle class. And with every step of the way they become more westernized. Our influence on their culture is quite evident everywhere (not that that’s an entirely good thing).

Although few Chinese speak English now, the government has mandated that all students learn it so the generation coming up will be English speakers (and since there are, I believe, some 56 dialects and most Chinese speak only their own, in the not too distant future, they’ll be speaking English to each other as well). Young adults in China are hip, stylish (much more so than we), in general despise their government and give every indication they will refuse to be held back from achieving “new world” prosperity. I liked them very much. Are there lots of problems in China? OMG yes and serious ones. But the signs of an emerging vast middle class are everywhere. I believe there will be no stopping them.

One of the more intriguing economic predictions I read at the end of the year was that within five years virtually everyone on the planet will have a smart phone and that will change the way in which business is done. I find these glimpses of the future utterly fascinating and can’t wait to see how it all shakes out. Ain’t the free market grand!

Those glimpses of the future make me all the more eager to get our own fiscal house in order so that we’re not only able to share in this coming prosperity, but able to lead in it. We still lead the world in technological innovation and, along with our NAFTA partners, we can become the leading producers of energy (something, btw, that China consumes at a breathtaking pace). Those two things alone can keep us at the top of the heap for many, many years to come. To the future!